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Dreier Gets 20 Years

Posted by Zach Lowe

If you were forced to pick a winner in the Marc Dreier sentencing late Monday, we supposed you'd have to pick Dreier and his lawyers, since a federal judge ignored government requests for a 145-year prison term and handed down a 20-year sentence for the Am Law world's most famous fraudster, according to the New York Law Journal, which posted this story on the hearing Monday evening.

The inevitable comparisons with Bernard Madoff dominated the hearing, but the NYLJ says the differences between the two frauds--both uncovered in December--explain the huge gap between Dreier's 20-year sentence and Madoff's 150-year term. Lawyers are still trying to figure out the extent of Madoff-related losses, once estimated to be as much as $50 or $60 billion, while everyone pretty much agrees now that Dreier bilked hedge funds and other investors out of about $400 million by offering bogus promissory notes.

Judge Jed Rakoff of U.S. District Court in Manhattan also considered Dreier a relatively cooperative defendant, according to the NYLJ. Rakoff said Monday he was "surprised" by the "maturity" Dreier showed in a letter to the judge last week, in which Dreier took responsibility for his fraud and asked for a shorter sentence, the NYLJ reports. In that letter, which you can read about here, Dreier said he began stealing from a client account in 2002, and that he continued stealing and buying extravagant items to feed his battered ego.

Judge Denny Chin, the Southern District Judge who hammered Madoff with a 150-year sentence last month, admonished Madoff for failing to cooperate fully with the prosecution of his case and the unwinding his assets.

In fairness, government prosecutors seemed to expect that Rakoff, not known as a supporter of sentencing guidelines in white-collar cases, would not come close to their 145-year request. They submitted a back-up request for a 30-year prison term, the NYLJ says. So Rakoff ultimately settled on a number almost exactly between that back-up request and Dreier lawyer Gerald Shargel's call for a 10- or 12-year sentence.